The Essential Qualities of an Effective Multi-Family Housing Operator
WHAT MAKES A GOOD OPERATOR?
Purchasing your Manufactured Home Community is only the beginning, the operation of the community is what will make or break your asset. First instinct for new companies/owners is to want to run this business themselves, after all – Manufactured Housing is famous for being able to run profitably with little involvement. The days of profitably operating a community like my grandfather did in 1968 are over- owners need more than a pegboard accounting system and a community manager just keeping the lights on. The operator of a community can make a 2 star asset into a 4 star asset and visa versa, they are largely responsible for the delinquency and occupancy and what rent amount a community can collect. When looking for a company/individual to operate your communities, take the following into consideration:
A good operator is organized and has a set operating system
Good operators have documented processes and procedures that explain how to do each job a community/field employee would need on a day to day basis and the community staff is supported through an active supervisor and technology.
They need to have Manufactured Housing Community Experience, no exceptions
Manufactured Housing Communities are unlike any type of multi-family real estate, the main asset for MH is our land- not our building. Operators need to know the ins and outs of road systems, water and sewer lines, wastewater treatment methods/systems, landscaping along with many more. This industry is filled with nuance and no two days are the same- so the operator must be organized and a skilled problem solver.
Always ask for actual results
Anyone claiming that they experts in infilling, community revitalization, value addition and rental portfolio creation and implementation should be able to provide the specific results for these ventures. When evaluating an operator, be sure to check the delinquency numbers, incentives given to residents during infill, attrition rates, water and sewer recapture rate and site and home rent amounts. The bottom line is always king, so be sure to see how much they acquired the community for, what the capital investment was and the final sale price of the community. Then, be sure to see what other value add projects have been done in the local market, to get a complete evaluation on the operators’ abilities.
The three points outlined in this article are meant to be a basic expectation of the responsibilities of an operator- not a comprehensive overview. Operators should be proactive on the market and industry and be one step ahead of what everyone else is doing. My family and I learned a valuable lesson during the last recession, if you do not provide day-to-day value for your residents, they will leave when things get tough. If your residents find value in where they live, they will fight for it when times are tough.